The Economy

Manufacturing's Slower Grow

Dec. 12, 2005

Production generally is expected still to be positive in 2006 and 2007.

U.S. manufacturing, running a very respectable growth rate of 3.4% this year, will likely slow to a 2.5% rate next year and to a growth rate of 2.2% in 2007, predicts the latest quarterly forecast from the Manufacturers Alliance/MAPI, an Arlington, Va.-based business and public policy research group. In contrast, manufacturing production grew a torrid 4.8% pace in 2004.

That's not to say there won't be sectors of fast-paced growth ahead, however. For example, the alliance's forecast expects production of machinery destined for mines and oil and gas fields to rise 49% in 2006 and another 22% in 2007 -- both on top of an estimated increase of 18% for 2005. Meanwhile, spending on computers, up an anticipated 35% in dollar terms this year, is forecast to increase 13% in 2006 and 12% in 2007.

Much of the growth in manufacturing production, if it occurs as forecast, will be more modest during the next two years. For example, appliance production is expected to grow 5% in 2006 and 1% in 2007. Basic chemicals production is expected to increase 3% in 2006 and 2% in 2007. Metalworking machinery production is expected to 3% in 2006 and 3% again in 2007. Industrial machinery production is expected to grow by 4% in both 2006 and 2007. Production of pharmaceuticals and medicines is expected to increase 3% in 2006 and 4% in 2007. Production of fabricated metal goods, a category that includes ball bearings, forgings, stampings and fasteners, is expected to increase 2% in 2006 and 2% again in 2007. And paper production is expected to grow 1% in each of the next two years.

For other segments of manufacturing, there is likely to be a mix of decreases and increases. For example, U.S. alumina and aluminum production is expected to decline 1% in 2006 and then increase 2% in 2007. After a 3% increase in production in 2005, motor vehicles and parts are expected to post 2% declines in 2006 and 2007. And following an 8% decrease this year, steel production is expected to be flat in 2006 before increasing 3.1% in 2007.

Other production projections from Manufacturers Alliance are:

	2006	2007
Aerospace	+6%	+4%
Communications equipment	+15%	+8%
Construction machinery	+3%	+5%
Electrical equipment	+4%	+3%
Electric lighting equipment	+5%	+4%
Engine, turbine & power transmission equipment	+4%	+1%
HVAC equipment	+6%	+5%
Instruments	+9%	+2%
Medical equipment	+6%	+4%

About the Author

John McClenahen | Former Senior Editor, IndustryWeek

John S. McClenahen, is an occasional essayist on the Web site of IndustryWeek, the executive management publication from which he retired in 2006. He began his journalism career as a broadcast journalist at Westinghouse Broadcasting’s KYW in Cleveland, Ohio. In May 1967, he joined Penton Media Inc. in Cleveland and in September 1967 was transferred to Washington, DC, the base from which for nearly 40 years he wrote primarily about national and international economics and politics, and corporate social responsibility.

      McClenahen, a native of Ohio now residing in Maryland, is an award-winning writer and photographer. He is the author of three books of poetry, most recently An Unexpected Poet (2013), and several books of photographs, including Black, White, and Shades of Grey (2014). He also is the author of a children’s book, Henry at His Beach (2014).

      His photograph “Provincetown: Fog Rising 2004” was selected for the Smithsonian Institution’s 2011 juried exhibition Artists at Work and displayed in the S. Dillon Ripley Center at the Smithsonian Institution in Washington, D.C., from June until October 2011. Five of his photographs are in the collection of St. Lawrence University and displayed on campus in Canton, New York.

      John McClenahen’s essay “Incorporating America: Whitman in Context” was designated one of the five best works published in The Journal of Graduate Liberal Studies during the twelve-year editorship of R. Barry Leavis of Rollins College. John McClenahen’s several journalism prizes include the coveted Jesse H. Neal Award. He also is the author of the commemorative poem “Upon 50 Years,” celebrating the fiftieth anniversary of the founding of Wolfson College Cambridge, and appearing in “The Wolfson Review.”

      John McClenahen received a B.A. (English with a minor in government) from St. Lawrence University, an M.A., (English) from Western Reserve University, and a Master of Arts in Liberal Studies from Georgetown University, where he also pursued doctoral studies. At St. Lawrence University, he was elected to academic honor societies in English and government and to Omicron Delta Kappa, the University’s highest undergraduate honor. John McClenahen was a participant in the 32nd Annual Wharton Seminars for Journalists at the Wharton School at the University of Pennsylvania in Philadelphia. During the Easter Term of the 1986 academic year, John McClenahen was the first American to hold a prestigious Press Fellowship at Wolfson College, Cambridge, in the United Kingdom.

      John McClenahen has served on the Editorial Board of Confluence: The Journal of Graduate Liberal Studies and was co-founder and first editor of Liberal Studies at Georgetown. He has been a volunteer researcher on the William Steinway Diary Project at the Smithsonian Institution, Washington, D.C., and has been an assistant professorial lecturer at The George Washington University in Washington, D.C.